Dean, Inc Owns 90 Percent of Ralph, Inc

question 12

Multiple Choice

Dean, Inc. owns 90 percent of Ralph, Inc. During the current year, Dean sold merchandise costing $80,000 to Ralph for $100,000. At the end of the year, 30 percent of this merchandise was still on hand. The tax rate is 30 percent.
Assuming that separate income tax returns are being filed, what deferred income tax asset is created?

• A) $0.
• B) $1,100.
• C) $1,800.
• D) $6,000.
• E) $9,000.

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